DeepDyve eBooks - A Moderate Compromise

Chapter 1Introduction

Suranovic, Steven

Pages: 1 –11

[We study economics because we care about people. The global economic system produces and distributes goods and services to over six billion people around the world. These goods and services contribute to people’s sustenance, shelter, warmth, security, entertainment, knowledge, and self-worth,...

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Chapter 2Why Economic Theory Cannot Tell Us What to Do about Policy

Suranovic, Steven

Pages: 13 –41

[Much of what theory can teach us about the appropriate role for government policy can be gleaned by understanding what theory teaches about international trade. This is because international trade theory has largely used what are known as general equilibrium models to understand the effects of...

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Chapter 3Why Empirical Data Cannot Tell Us What to Do about Policy

Suranovic, Steven

Pages: 43 –65

[Economic theory strongly supports the following two conclusions: first, trade liberalization will result in a complex redistribution of income; and second, depending on the circumstances, trade liberalization can lead either to an improvement or to a reduction in a nation’s total welfare....

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Chapter 4Why Fairness Cannot Tell Us What to Do about Policy

Suranovic, Steven

Pages: 67 –85

[If we cannot identify who wins and loses, and we cannot measure outcomes very precisely, and we cannot compensate effectively, then how are we supposed to decide what to do? How are trade policies, or other public policies, to be chosen? One possible answer is provided by groups that have risen...

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Chapter 5Why Democracies Will Not Choose the Best Policies

Suranovic, Steven

Pages: 87 –111

[Economic theory supports the contention that many people will suffer losses because of globalization, but it also clearly shows that many other people will benefit. Because globalization will not affect everyone equally, and because there are many winners and losers, globalization is naturally...

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Chapter 6The Pursuit of Profit

Suranovic, Steven

Pages: 113 –131

[Economists and others, who support globalization, tend to look favorably upon profit seeking by firms. Neoclassical economic models are built on the assumptions that firms maximize profit and consumers maximize utility. Adam Smith’s famous passage about the butcher, brewer, and baker is often...

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Chapter 7Involuntary Transfers

Suranovic, Steven

Pages: 133 –155

[Transfer profit is a benefit received by one agent as a direct consequence of a comparable loss to another. With transfer profit, one party gains, the other loses equally; nothing new is produced. There is no surplus value accruing as with voluntary exchange. There are two variations of transfer...

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Chapter 8Voluntary Exchange and Competition

Suranovic, Steven

Pages: 157 –188

[Mutually voluntary exchange is the best example of a win-win situation. Whenever a bilateral exchange occurs, both parties must profit, for if not, one party would simply have refused to trade. This basic result is sometimes used to argue that a free market economy, consisting of billions or...

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Chapter 9Voluntary Transfers

Suranovic, Steven

Pages: 189 –204

[A competitive free market economy, absent involuntary transfers, will lead to higher incomes for whoever is able to provide the greatest benefit to others. Some successes will arise because the person works long and hard, others successes will accrue to those who are smart or clever, while still...

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Chapter 10A New Guide to Policy Choice in an Era of Globalization

Suranovic, Steven

Pages: 205 –239

[One of the most important questions in economics and politics is what sort of laws, institutions, and policies a society should implement. A country’s constitution defines the basic rules and procedures determining how a country will be governed and what rights and privileges its citizens will...

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A Moderate Compromise

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A Moderate Compromise

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